CONCORD, Calif. – NCUA on Friday said it has taken over another credit union that has failed because of its mortgage lending, Cal State 9 CU.
The $390 million credit union had almost $26 million of delinquent real estate loans and $9 million of losses at mid-year, the latest period for which figures are available. The credit union reported $54.5 million in loan and lease losses in its September quarterly report on file with the state; in the previous quarter the reported losses amounted to $17 million. The Cal State 9 problems apparently were focused on the credit union’s home equity loan program.
"The credit union," said Carol Chesbrough, the state’s interim commissioner of financial institutions, "had impaired capital and had become insolvent,"
NCUA said it will look for a merger partner for the failed institution.
The failure follows recent real estate-related failures of $340 million Norlarco CU and $320 million Huron River Area CU. Cal State 9 CU originally was chartered in 1948 to serve University of California employees.
